But the Great War that erupted one hundred years ago this year would leave an indelible stain on the national psyche and economy.

World War 1 ... Australia’s single most cataclysmic event. Picture: State Library of NSW)Source:Supplied

Close to two in five of the total male population aged between 18 and 44 volunteered for service. Two thirds of those would become casualties of that war — either killed, wounded, suffering sickness, missing or made prisoner of wars.

The war that gave the world trench warfare and the sickening effects of mustard gas, also gave Australia one of the highest casualty rates of the war.

To this day, the Great War that erupted in 1914 remains the single most cataclysmic event this nation has ever suffered, in terms of lives lost and the impact on our economy.

The 60,000 mostly young men who died in battle left behind them a generation of widows who would never know the joy of children.

Australia’s national fertility rate in the 1920s fell from an average of three live births per woman to an average of just two live births.

As war gave way to Depression, Australia was forced to look to migration to fill its population gap.

Unlike the Second World War, which would give way to a so-called “golden age” of fertility and economic stability, the First World War was an “absolute disaster” for Australia and the world, according to Peter Yule, an economic historian at the University of Melbourne.

“The Second World War really built up the Australian economy enormously,” says Yule. “The first world war was just a disaster.”

Call to arms . Another WWI recruiting poster.Source:Supplied

Would it work today ... Close to two in five of the men volunteered.Source:Supplied

Unlike the Second World War, the Australian economy in 1914 was less diversified, more heavily reliant on imports and with a limited number of customers for its agricultural and mineral exports.

And it wasn’t just the loss of life.

“Clearly the fact that we lost a lot of young men in the prime of their lives had an impact,” says Yule.

But perversely, the unemployment wrought by the war would have been even worse if not for the loss of life.

Indeed, many of the young men who enlisted came from industries and areas of Australia most affected by the loss of jobs during the war, such as coal mining and timber.

“If hundreds of thousands of men hadn’t gone to war there would have been massive unemployment.” As it was, the jobless rate soared from 6 per cent to 11 per cent in the first year of the war.

In the blink of the eye, international trade routes came to a standstill. A golden era of freer trade, ruled by a gold standard, was totally destroyed the day the war started.

Germany was, at the time, the biggest buyer of Australian metal exports and other commodities like wool and wheat.

Australia’s annual economic output shrank 12 per cent in 1914-15. That remains the worst year for the economy since Federation, according to Treasury figures. The Great Depression that would follow would slice just 10 per cent from growth in 1930-31.

Some industries benefited from war. BHP’s steelworks in Newcastle was born. The lead plant at Port Pirie was at one point the biggest producing in the world. Broken Hill’s zinc industry began to bloom. As Germany held the sole patent to aspirin, a home grown Australian pharmaceuticals industry was born of backyard experimentation.

WWI led to economic Depression ... Another recruiting poster. Picture: State Library of NSource:Supplied

But Australians suffered.

Inflation — the product of government printing money to fund the war effort — eroded pay packets. Mass strikes were held in protest.

The burden of the First World War fell squarely on the poorest in society, according to a recent account of inequality in Australia by former academic economist, turned Federal Labor MP, Andrew Leigh.

According to Leigh, the Second World War saw a shift in Australia’s social compact because most Australians in 1939 retained vivid memories of the devastation caused by war. “In 1939, unlike in 1914, there was a recognition of the massive sacrifice that war entailed. There was, therefore, a strong belief that the burden must be shared fairly across the community.”

Remembering the devastation of the First World War, government acted to control prices, gave entitlements to war widows and returned servicemen and set about a program of mass migration to boost the economy.

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